Transeastern Power Trust
TSX VENTURE : TEP.UN
TSX VENTURE : TEP.DB

Transeastern Power Trust

May 02, 2016 09:25 ET

Transeastern Power Trust Reports 2015 Results

TORONTO, ONTARIO--(Marketwired - May 2, 2016) - Transeastern Power Trust ("Transeastern" or the "Trust") (TSX VENTURE:TEP.UN)(TSX VENTURE:TEP.DB) has released its audited financial results for the year ended December 31, 2015. All amounts in this release are expressed in Canadian dollars unless otherwise indicated.

2015 Highlights

  • On July 24, 2015, the Trust completed the acquisition of two operating solar parks adding 16MWp to its producing asset base increasing the Trust's installed capacity by more than 300%.
  • Produced a total of 29,178 MWh of energy in 2015 generating revenue of approximately $3.5 million, with $0.8 million from the sale of electricity and $2.7 million in revenue from the sale of green certificates.
  • Declared and paid quarterly distributions in 2015 for an annualized distribution of $0.0875 per unit of the Trust (each, a "Unit"), through a combination of cash and Unit issuances to unitholders who elected to participate in the Trust's distribution reinvestment plan.
  • Incurred net loss of $12.6 million during the year (2014: $3.2 million) with basic and diluted loss of $0.65 per Unit (2014: $0.43 per Unit).
  • Net loss includes a total of $7.9 million in non-cash or one-off charges summarized as follows: $3.3 million of non-cash impairment charges to our Zagra and Suha hydro projects based on an updated fair value assessment using higher discount rates to reflect the Trust's cost of capital, $1.2 million of settlement losses on short term financial liabilities, $1.1 million premium paid to acquire Mediterranean Resources Ltd., $1.5 million in mark to market charges on our milestone units and convertible debentures and $0.8 million in transaction costs related to acquisitions over the course of the year.
  • Earned operating margin1 (revenues less operating expenses) of $1.5 million for the year, an increase of approximately 620% over the period from May 28, 2014 to December 31, 2014 where operating margin was $(0.3) million (see reconciliation of operating margin under "non GAAP Measures").

Subsequent to December 31, 2015:

  • the Trust signed letters of intent for the acquisition of a 17 MW operational wind project located in Romania that generates approximately 45,000 MWh of electricity annually and three operational hydro projects totaling 3.65 MW located in Romania and generate approximately 10,000 MWh of electricity; and
  • the Trust signed a letter of intent to obtain a $10 million secured debt and royalty facility.

J. Colter Eadie, Chief Executive Officer of Transeastern commented "We are looking forward to a full year of operations from the recently acquired solar acquisitions. The proposed acquisitions of the additional wind and hydro projects will help to advance the Trust's long term goals of diversifying its power generation sources and increasing the production base. Through increased production and improvements to the Trust's financial structure, the Trust will continue along the path towards developing a robust stream of free cash flows to support the ongoing operations of the Trust along with distributions to the unitholders."

About Transeastern

The Trust, through its direct and indirect subsidiaries in Canada, the Netherlands and Romania, has been formed to acquire interests in renewable energy assets in Romania, other countries in Europe and abroad that can provide stable cash flow to the Trust and a suitable risk-adjusted return on investment. The Trust seeks to provide investors with long-term, stable distributions, while preserving the capital value of its investment portfolio through investment, principally in a range of operational assets, which generate electricity from renewable energy sources, with a particular focus on solar and hydro power. The Trust intends to qualify as a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). All material information about the Trust may be found under Transeastern's issuer profile at www.sedar.com.

Forward-Looking Statements Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the energy law, expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, high inflation rates, failure to obtain bank financing, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), risks related to seasonality (including adverse weather conditions, shifting weather patterns, and global warming), a shift in energy trends and demands, a shift in energy generation in the European Union, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Details of the risk factors relating to Transeastern and its business are discussed under the heading "Risks and Uncertainties" in Transeastern's annual management discussion and analysis dated April 29, 2016, a copy of which is available on Transeastern's SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Trust. Investors are cautioned not to put undue reliance on forward-looking information. These statements speak only as of the date of this press release. Except as otherwise required by applicable securities statutes or regulation, Transeastern expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

1 Operating margin is a non-GAAP measure calculated by deducting cost of sales from revenues. Refer to "Review of Operations" in the Trust's Management's Discussion and Analysis for the year ended December 31, 2015 for further details.

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